One in ten Germans has taken on debt during the crisis, and equally as many have been unable to meet their liabilities
Debt caused above all by living expenses
Single parents (26 percent) and young people (18 percent) disproportionately affected
Hamburg, February 25, 2021 – The Covid-19 pandemic is having a profound impact on the consumption patterns and financial situation of many consumers in Germany. As a result of the outbreak of Covid-19, around one in ten has been forced to take on debt. These are some of the insights from the recent Covid-19 Financial Report by financial services provider and investor EOS, based on a representative survey in five European countries. The report shows that the respondents from Germany borrowed money mainly just to make ends meet: 39 percent of the Germans with debts have borrowed money to cover their ongoing living expenses, while 29 percent borrowed to cover housing costs and 20 percent for health-related costs. The majority (57 percent) had debts of up to €2,500, while 40 percent owed even more than that. One problematic issue is that 12 percent of respondents stated that since the start of the pandemic they have no longer been able to pay back their liabilities.
“We are currently in an exceptional situation that was difficult to predict and hard to plan for, and that nobody expected. If some people are then forced to take on debt temporarily to cover the necessities of life, that is perfectly understandable. However, it is highly problematic if they can then no longer meet their obligations as a result,” explains Andreas Kropp, member of the EOS Group’s Board of Directors with responsibility for the German market.
Single parents and younger people suffer particularly from the crisis
The pandemic is hitting single parents the hardest, with one in four (26 percent) stating that they have incurred debt as a result of Covid-19. As many as 23 percent have even ended up with excessive debt. Moreover, 39 percent of single parents fear that they will have to borrow money in the next six months as a result of the Covid-19 crisis. Another population group with a disproportionately high financial burden consists of young people aged 18 to 29, 18 percent of whom said they had got into debt because of the pandemic. By way of comparison, this was the case for just 6 percent of 50-65 year-olds. In addition, 31 percent of the younger generation fear that they are going to have to take on debt in the future, whereas this applied to just one in ten of older respondents.
Germany still in a comparatively good position
To some extent, a European comparison paints quite a different picture. Whereas in Germany 12 percent of respondents had got into debt, this situation had affected 15 percent in Spain, 19 percent in Croatia, 28 percent in Romania and as many as 32 percent in Bulgaria. “German government measures like short-time work payments or economic assistance have helped to protect many Germans from debt due to the pandemic,” says Kropp. “Accordingly, Germany has so far come through the crisis with relative stability.”
Germans are cutting expenditure above all on vacations, but are keen to travel again soon
The strained economic situation is nevertheless being reflected in the consumption patterns of Germans. A large majority (80 percent), for example, have refrained from necessary or planned expenditure during the pandemic. German consumers most often went without their vacation (65 percent), but were also cutting spending on furnishings (21 percent), renovations (19 percent) as well as on health (12 percent) and education (12 percent). And after the crisis? Above all, Germans are longing to travel again. After the pandemic is over, 60 percent plan to spend money on a vacation first.
About the EOS Group’s Covid-19 Financial Report
On behalf of the EOS Group, online survey specialist Dynata polled 7,000 consumers (of whom 2,000 were Germans) aged 18-65 in Bulgaria, Germany, Croatia, Romania and Spain. The respondents provided information about how the Covid-19 pandemic had affected their consumption patterns and financial situation. The survey was conducted in January 2021 and is representative of the (online) population aged 18 years and over in the participating countries.
About EOS Group
The EOS Group is one of the leading technology-driven financial investors and an expert in the processing of outstanding receivables. The company's core business is the purchase of unsecured and secured debt portfolios. With over 40 years of experience, EOS offers some 20,000 customers in 26 countries around the world smart services for all their receivables management needs. Its key target sectors are banking, insurance companies, utilities, real estate and e-commerce. EOS employs more than 7,500 people and is part of the Otto Group.
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